Board of Public Finance admits growth above 2 … – Jornal da Madeira

The Board of Public Finance admits economic growth above 2% annually from 2016 if the state return all the pay cuts in the public sector and end the surcharge in office . IRS
In the “absence of new policy measures”, the Board of Public Finance (CFP) points to an even higher growth than predicted by the Government: 1.6% this year, 2.3% and 2.4% in 2016 and 2017, respectively, remaining at 2.2% in the following two years.
The government predicted in October, the State Budget for 2015, the economy to grow 1.5% this year and in April of last year, the Fiscal Strategy Paper (DEO), anticipated growth of 1.7% for 2016.
A “key point” for this scenario concerns the impact of the hypothesis of invariant policies, especially the replacement of remuneration reduction of civil servants and the failure to consider the surcharge of revenue on the IRS from 2016 explains the CFP
In presenting the report of the press “Public Finances:. Situation and Constraints 2015- 2016, “the president of the CFP, Teodora Cardoso, said that from 2016, with the replacement of wage cuts in the public sector and the end of the 3.5% surcharge on personal income tax,” there will be an impact, either in budget or the economy. “
CFP safeguard, however, that this scenario of medium term only takes into account the measures” were adopted and for which there is sufficient evidence to characterize and quantify their effects “, warning of the” need for prudence “taking into account” the anualista tradition of budget forecast exercises “that prevails.
This means that the CFP considered in the projections released today the elimination of the IRS and the surcharge end of wage cuts in the public service, because the application of these austerity measures depends on new legislation the Government.
In the report, the organization led by Teodora Cardoso stressed that the proposed economic growth “based mainly” in the contribution of domestic demand in the continuation of private consumption growth, but also growth “modest” employment.
CFP estimated employment increase 0.2% in 2015, 0.3% in 2016, 0.7% in 2017 0.6% in 2018 and 0.8% in 2019, a growth that is “based on a recovery of the economy mainly based on increased productivity, which, in the absence of additional measures imply a slow recovery in the unemployment rate” .
On the other hand, the CFP estimates that public debt to fall by 2018 less than expected by the government DEO, projecting that public debt is set at 121.9% of GDP this year (almost eight percentage points above the Executive’s projection of 114%).
“The slower pace of reduction in the debt ratio presented in CFP projections does not ensure compliance with the debt of over-correction rule”, warns the Council in the report released today.
Portugal is still in the procedure for excessive deficit, but closed this facility shall be required to comply with public debt reduction rule defined in the Budgetary Treaty, according to which countries that have a ratio above 60% of GDP must reduce the amount above that amount at a rate of one twentieth per year

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